Mexico kills top drug lord at U.S. border

MONTERREY, Mexico (Reuters) - Mexican marines killed drug baron Ezequiel "Tony Tormenta" Cardenas in a ferocious gunfight at the U.S. border on Friday, a fleeting victory for President Felipe Calderon that is unlikely to quell raging violence.

Around 150 marines backed by helicopters and soldiers fought running battles with members of the powerful Gulf cartel for hours in Matamoros, across from Brownsville, Texas, terrifying residents and briefly shutting border bridges.

Dodging grenades and coming under heavy fire from gunmen hidden in houses and shooting from trucks, the marines moved in on Cardenas, one of Mexico's most-wanted traffickers, and killed him on Friday afternoon, the navy said.

"He died in a shootout with us," a navy spokesman said.

Three marines and four gunmen were killed, the navy said. A reporter was killed after being caught in crossfire, local media reported.

Cardenas, 48, was the brother of former Gulf cartel leader Osiel Cardenas, who was extradited to Texas in 2007. He had a $5 million bounty on his head in the United States and ran the powerful gang with his partner, Jorge Eduardo Costilla, known as El Coss, who is still at large.

Praised in drug ballads, Cardenas won his nickname of "Tony Tormenta" (Tony Storm) for beheading and torturing rivals.

RISK OF MORE VIOLENCE

The Gulf cartel, which dominates trafficking from northeastern Mexico into Central America and has cells across the United States, is pitted against its former armed wing, the Zetas, in an unrelenting turf war.

That violence has spread into Mexico's richest city of Monterrey near the Texas border, in a escalation of the drug war that worries foreign investors with factories in the area.

More than 31,000 people have been killed across Mexico since December 2006, when Calderon took office and launched his army-led crackdown. The government is under increasing pressure to contain the burgeoning death toll across the country.

Drug gangs blocked roads and set fire to gas stations in the colonial city of Morelia in western Mexico on Friday evening after soldiers captured a local drug gang leader, state news agency Notimex said.

Calderon's national security chief Alejandro Poire lauded Cardenas' killing as a major success in weakening the cartels that generate up to $40 billion a year in narcotics sales in the United States.

"Today, we are taking a significant step in dismantling the criminal gangs that do so much damage to our country's population," Poire told reporters.

But drug trade specialists warned the violence will continue as long as Mexico fails to reform the corrupt judicial, police and prison services that help feed the cycle of killings.

"This is unfortunately going to fuel the spiraling violence because rivals will try to take advantage of the Gulf cartel's weakened state," said Pedro de la Cruz, a security analyst at Mexico's National Autonomous University.

Calderon has pledged reform but has failed to get initiatives through a divided Congress, focusing mainly on army-led operations that have led to the capture or killing of several top drug lords since late last year.

But the Zetas, blamed for some of the worst atrocities in the drug war including the murders of 72 migrants in August, appear to be relatively unscathed by the crackdown and their top operators are still at large.

Additional reporting by Armando Tovar in Mexico City; Editing by Eric Walsh and John O'Callaghan